The Courier & Advertiser (Fife Edition)
Insurer in £600m shares buy-back
Insurance giant Aviva has announced a £600 million shares buy-back as part of efforts to deploy £2 billion of excess capital.
Alongside the buy-back, the group said £900m will be spent on debt reduction and £500m in bolt-on acquisitions, confirming figures released in March.
Chief executive Mark Wilson said: “Aviva has significant surplus cash and capital and we are deploying £2bn productively in 2018.
“The £600m buy-back, together with our plan to repay £900m of expensive debt maturing this year and invest in bolt-on acquisitions, will grow Aviva’s earnings, strengthen cashflow and improve debt ratios.”
The move comes a day after Aviva pledged to make a £14m “goodwill payment” to shareholders who lost out when it cancelled £450m worth of preference shares, before the insurance giant U-turned on the plans.
The group said on Monday it recognised the “uncertainty” created for preference shareholders and the impact the move had on its reputation.
It said the payout was the “right thing” to do in the circumstances.
The goodwill payment will apply to those who sold preference shares between March 8 and March 22.
The FTSE 100 insurer believes fewer than 2,000 investors were affected.
The original proposal had drawn criticism from investors and the Financial Conduct Authority, although Aviva said it had received legal advice that it could cancel its preference shares at par value.